ALAN KRUEGER, a leading US labour market economist, will be the next chair of Barack Obama’s Council of Economic Advisers, the president announced yesterday.

The Princeton economist is well known for his work on issues such as minimum wages and the causes of rising income inequality, making him a natural choice at a time when the biggest issue facing the White House is unemployment. He is also an expert on the economics of terrorism and rock music.

“As one of this country’s leading economists, Alan has been a key voice on a vast array of economic issues for more than two decades,” said Mr Obama. “Alan understands the difficult challenges our country faces, and I have confidence that he will help us meet those challenges as one of the leaders on my economic team.”

Mr Krueger is already well known to the other members of Mr Obama’s economic team, having worked as chief economist at the treasury department in the first two years of this administration, following a stint at the labour department during the Clinton administration in 1994-95.

His senate confirmation should be made easier in today’s highly partisan political environment as he has undergone the process for his treasury post.

Mr Krueger (50) replaces Austan Goolsbee, who resigned in June to return to University of Chicago. He will be the third Council of Economic Advisers chair of the Obama administration, after Christina Romer, who returned to academia in 2010, and Mr Goolsbee. The council sits slightly apart from the main policy machinery in the White House and provides analysis to the president.

The high unemployment rate, which remains above 9 per cent, has cast a cloud over Mr Obama’s re-election prospects next year and threatens to brand him a poor economic manager.